The Albany Syndrome: Third of Three Articles

Lax New York Laws Make Big Money Bigger

By RICHARD PÉREZ-PEÑA

Published: October 22, 2002

ALBANY, Oct. 21 — A remarkable series of legislative battles was fought here over the last year, linked by a recurring theme. In each case, powerful business and labor interests, armed with well-connected lobbyists and money for campaign contributions, won a victory that looked unlikely not too long before.

The Legislature and Gov. George E. Pataki legalized several forms of gambling that they had earlier rejected. They approved billions of dollars of new health care spending, just a few years after cutting the same areas. They legalized the sale of lucrative temporary insurance policies by car rental companies, a practice they had banned 14 years ago. They appeared poised to ban smoking in restaurants, then let the measure die.

Moneyed interests can always make themselves heard, and often in Albany and other capitals, they get their way. But in New York, where top legislators, the governor and administration officials do much of their most important work in virtual secrecy, the system amplifies the private voices of the few who have the lawmakers' ears.

Like every state, New York has rules and agencies governing areas like campaign financing, lobbying and gifts to public officials — all intended to curb the influence of special interests. But New York's rules are more lax than those in most other states and in the federal government, and the enforcement is lax, as well.

In recent years, some people, like Tom Golisano, the Independence Party candidate for governor, have complained about the influence of special interests in Albany. A New York Times poll conducted last week found that 82 percent of voters said they believed that campaign contributions from such groups influenced most elected officials' decisions.

But so far, there is no sign of the gales of outrage Mr. Golisano is hoping for. Perhaps that is because, while many officials here admit privately there is truth to what he says, each insists it is someone else's friends who wield undue influence, and someone else who is influenced.

The fate of the bill to outlaw smoking in restaurants provides a case study in the ability of moneyed interests to mobilize against lesser-financed opponents.

Early this year, the Republicans, who control the State Senate, signaled that after years of resisting, they were prepared to ban smoking in restaurants. The majority leader, Joseph L. Bruno, spoke in favor of the idea. The Senate held a public hearing on it and the Health Committee approved a bill and sent it to the Senate floor. On April 23, the Senate placed the bill, S4989, on its third reading calendar, after which it could be put to a vote at any time.

To the bill's opponents, those actions were a call to arms. The forces arrayed against the bill, including the tobacco, restaurant, bar and alcohol industries, have always been powerful presences in Albany, but they stepped up their efforts this year, pouring more than $1.3 million into campaign contributions and a legion of lobbyists — significantly more of both than in previous years. Restaurant and bar owners and industry associations, as well as their outside lobbyists, barraged legislators and Governor Pataki with calls and letters, complaining of harm the antismoking bill would do.

For a while, it looked as if they might lose. But under pressure from restaurant and bar owners, Mr. Bruno and his Senate troops decided that the bill should exempt small restaurants or somehow make it easier for them to comply. Talks with the Assembly, which was about to pass its own bill, deadlocked on that issue, and the Senate never voted on the bill.

"This was a textbook case of how money talks, how money gets its way around here," said Russell Sciandra, director of the Center for a Tobacco-Free New York, a leading advocate of a smoking ban.

Governor Pataki avoided commenting on the no-smoking bill until late in the legislative session, when he and his aides said that he had concerns about its effects on small restaurants, but that he had not formed a position. Several Republican senators said that, in fact, the governor was privately pressing Mr. Bruno to either kill the bill or water it down severely, a claim the governor's office denied.

Mr. Bruno said the bill died over a matter of principle.

"There was a legitimate concern about not hurting small businesses," he said. "We heard their concerns, and we were not going to ignore them." The campaign contributions, he said, "had nothing to do with it."

Generous With Loopholes

A report issued in July by the National Conference of State Legislatures documented a host of areas in which New York's rules and their enforcement are less strict than in most states: campaign financing; gifts to state officials; officials' disclosure of personal finances and gifts; speaking fees and other outside income for officials; ethics oversight of the Legislature; and the number of investigations conducted by ethics agencies, to name just some.

Over all, 35 states have stricter campaign finance restrictions than New York, the report shows. But even that analysis does not take into account the many loopholes in New York's system that big contributors like tobacco companies use.